>

St Louis Real Estate Search

St Louis Mortgage Rate Update; What is Private Mortage Insurance (PMI)?

Mortgage Insurance, also know as Private Mortgage Insurance, is required by lenders on conventional home loans if the borrower is financing more than 80% Loan-To-Value.

Private Mortgage Insurance (PMI) allows borrowers to purchase a property by qualifying for conventional financing with a lower down payment. Private Mortgage Insurance protects your lender against non-payment should you default on your loan. It’s important to understand that the primary and only real purpose for mortgage insurance is to protect your lender—not you.

Automatic Termination of PMI…Thanks to The Homeowner’s Protection Act (HPA) of 1998, borrowers have the right to request private mortgage insurance cancellation when they reach 20 percent equity in their mortgage. What’s more, lenders are required to automatically cancel PMI coverage when a 78 percent Loan-to-Value is reached. Some exceptions to these provisions, such as liens on property or not keeping up with payments, may require further PMI coverage.

Private Mortgage Insurance and Mortgage Protection Insurance are terms that are often confused. Although they sound similar, they’re two totally different types of insurance products that should never be construed as substitutes for each other.

  • Mortgage protection insurance is essentially a life insurance policy designed to pay off your mortgage in the event of your death.
  • Private mortgage insurance protects your lender, allowing you to finance a home with a smaller down-payment.

Although PMI is an added expense to your real estate transaction or monthly payment, it is a necessary evil; PMI allows for purchases on conventional conforming loans with lower down payment options.

 

St. Louis MORTGAGE INTEREST RATES for April 25, 2012:

  • Conventional 30-Year Fixed 4.00%/ 4.190% APR
  • Conventional 15-Year Fixed 3.375%/ 3.565% APR
  • Conventional 5/1 ARM 2.375%/ 3.082% APR
  • FHA/VA 30 Year Fixed 3.750%/ 3.991% APR
  • Jumbo 5/1 ARM 2.750%/ 3.011% APR
  • Jumbo 15 yr Fixed 3.375%/ 3.630% APR
  • Jumbo 30 yr Fixed 4.750%/ 5.010% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.

 

 

Print Friendly, PDF & Email

Comments are closed.